Stock Market News

Deutsche Bank names Lloyds as "top pick" amongst UK banks

Deutsche Bank has chosen to reiterate its 'buy' rating on Lloyds Banking Group ahead of the lender's second-quarter results at the end of the month, saying that it its "top pick" in the UK banking sector.

"LBG provides attractive and cost-effective exposure to a strong UK economy, a profitable banking market, strong capital generation, and potential write-backs on weak credits taken in the downturn."

Deutsche Bank said it expects Lloyds' underlying results "to show continued delivery by management in de-risking and streamlining the bank", when it releases its statement on July 31st.

Analysts predict 20% year-on-year growth in underlying profit to £3.48bn in the second quarter. Meanwhile, the Basel III core tier-one capital ratio is forecast to improve to 10.7%, up from 9.1% the same time last year.

"We expect a long list of below-the-line items - including £500m in PPI conduct provisions - will see the bank report a small statutory loss for the second quarter but we do not expect this to materially detract from tangible net asset value growth or dividend prospects."

Deutsche Bank's target price for Lloyds has been trimmed slightly from 90p to 87p, though this still implies 20% upside to current prices.

Stock News is provided by Digital Look Corporate Solutions from Sharecast news.
Please read the terms and conditions of useage of this data. Republication or redistribution of content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Digital Look Ltd.

Get a free widget for your website with our latest headlines.

You can now add our live prices and new headlines to your website.The news widget features quotes for Oil prices, spot Gold price and Indices plus a choice of news channel for healines.